Department store chains may have fallen on hard times but Selfridges has bucked the trend by delivering a record profit for the fifth year in a row.
Operating profit rose £1mln to £181mln in the year to February 3 on the back of an 11.5% increase in sales to more than £1.75mln.
READ: Mike Ashley blames “greedy landlords” as he threatens to close handful of House of Fraser stores
A £300mln revamp of the London Oxford Street store helped attract customers. The refurbishment included a redesign and expansion of the site with a triple-height entrance on Duke Street that links the 1909 building with its 1930s extension.
Managing director, Anne Pitcher, said she believed there was a place for luxury department stores like Selfridges in a tough retail market.
“If you can create a sense of fun and the unexpected that inspires people to keep coming to your stores, it is a powerful recipe,” she said.
Luxury department store rival, Harrods, reported strong earnings last week with pre-tax profit rising 9% to nearly £216mln and sales rising 23% to £2bn.
In contrast, House of Fraser and Debenhams PLC (LON:DEB) have struggled against weak consumer confidence and online competition. Sports Direct International agreed to buy House of Fraser in August just hours after the chain went into administration when talks with creditors failed to reach an agreement.
Debenhams is currently undergoing a restructuring that includes closing down stores, cutting jobs and scrapping product lines to address poor sales.
READ: Debenhams confirms it is working with advisers to assess “longer term options”
Unlike its peers that have a large store presence in the UK, Selfridges has just four stores nationwide and an online business that ships to 130 countries.
“All our stores did well as more people than ever before visited them and we have recorded outstanding growth in our digital business. I think this is testament to the amount of focus we pay to experiences in our stores and how we engage with our customers,” Pitcher said.
Selfridges is owned by the Weston family, which also owns department store chains Brown Thomas and Arnotts in Ireland, Holt Renfrew in Canada and De Bijenkorf in the Netherlands.